Editorial correction — 14 October 2026: Earlier targeted corrections have now been expanded to a full-body source review. This expanded correction updates supplier packaging and free-access conditions while retaining the verified first-year deadlines. Exact-product suitability and your complete return need checking; no vendor is universally recommended.
For taxpayers in scope, MTD for Income Tax changes digital record-keeping and filing. This guide compares five suppliers’ published options and practical checks; it does not establish that every subscription under a brand covers every income source or completes every return.
Understanding the MTD Mandate: What the Rules Actually Require
For taxpayers in scope, the first MTD Income Tax year is 2026/27. Its quarterly updates are due on 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027. The tax return for that year is due by 31 January 2028, not January 2027. Check HMRC’s first-year timetable and staged qualifying-income thresholds.
Check both quarterly-update and complete tax-return support. A product that sends quarterly updates may need another product for other income or adjustments; record the full filing workflow before buying.
Who Needs MTD-Compatible Software From April 2026?
Check your qualifying income and any exemption using HMRC’s eligibility steps. The initial £50,000 test uses the 2024/25 tax return. Receiving an awareness letter alone is not a complete eligibility assessment; equally, not receiving one does not remove an obligation that applies to you.
If you have property and self-employment income, verify each source and any joint ownership or foreign income. Ask the supplier or adviser to demonstrate the complete return rather than infer support from a brand name.
How We Selected These Five MTD Tools
Use HMRC’s software finder and selection guidance to verify the specific product and income sources you need. HMRC recognition is a compatibility process, not a recommendation of one supplier. Do not infer that every plan under a listed brand has identical features.
Compare the exact plan’s price, supported income and filing scope. Keep a dated feature list and quote, and verify compatibility with HMRC’s finder.
MTD Software Options for UK Sole Traders and Landlords
Five suppliers to investigate, with plan-specific checks below. This is not an HMRC ranking.
| Supplier | Current distinction | Verify before choosing |
|---|---|---|
| Xero | Current accounting tiers | Transaction limits and complete tax workflow |
| QuickBooks | Sole Trader Plus and other products | VAT/employees/income eligibility |
| FreeAgent | Direct or qualifying bank-linked access | Mettle transaction condition; landlord account |
| Zoho Books | Free and paid UK plans | Required filing and bank-feed functions |
| Sage | Sole Trader Free differs from Accounting | Non-VAT sole-trader eligibility and income support |
Prices and conditions were reviewed on 14 October 2026. Free access can have eligibility conditions and paid extras; promotions are not normal renewal prices.
Xero — Accounting and Filing Scope
Pricing UK
Xero Simple remains a current option for non-VAT-registered businesses, including MTD Income Tax, with its own limits. Starter, Standard and Premium are retired plan names; they should not be confused with Simple. See the current Simple plan and the wider plan table. Check the transaction limits and exact tax-return scope.
MTD Compliance Features
Do not infer annual-return capability from the word “accounting” or an old Standard-plan label. Confirm the product you or your accountant will use for quarterly updates, all income and final submission. Accountant collaboration is useful only if the actual access and workflow meet your needs.
Best For
Consider Xero when its demonstrated accounting workflow and required tax functions fit your business. There is no evidence here that it removes all future switching needs.
Run a sample record-to-return workflow and compare the complete cost. Our accounting comparison addresses separate accounting questions; it is not a certification of your MTD setup.
QuickBooks — Sole Trader Plus and Plan Eligibility
Pricing UK
Intuit’s current product documentation describes QuickBooks Sole Trader Plus for non-VAT-registered sole traders without employees and landlords. The old Self Employed prices and the assumption that any Online plan completes every return were too broad. Check the current quote and exact filing scope.
MTD Compliance Features
The supplier describes bank feeds, receipt capture, mileage and MTD-compatible records for Sole Trader Plus. Check current HMRC recognition and the income, adjustments and final-return functions needed for your case. Do not assume its VAT scope matches other QuickBooks plans.
Best For
Consider a mobile trial if recording receipts away from a desk is important. Check extracted amounts, dates, tax treatment and duplicates; no comparative mobile-quality test was performed for this article.
Choose on a successful trial and full filing requirements, not the earlier claim that receipt handling guarantees a meaningful time saving.
FreeAgent — Bank-Linked Access Conditions
Pricing UK
FreeAgent offers qualifying bank-linked access. For Mettle customers, at least one account transaction each month is required; closing the account or not meeting the condition can lead to a subscription charge. Optional add-ons may be chargeable. Check current direct subscription terms for other customers.
MTD Compliance Features
FreeAgent describes an end-to-end MTD workflow. Confirm the account type and supported income; FreeAgent for Landlords is a distinct product choice. A projected tax figure still depends on complete and correct records.
Best For
Bank-linked access can be useful if you qualify and the product fits. It does not establish that every sole trader or landlord should choose it.
Include account eligibility, optional extras, supported income and your adviser’s workflow in the decision. A free subscription does not remove migration or review costs.
Zoho Books — Free and Paid Plan Functions
Pricing UK
Zoho’s UK plan table lists Free with one user plus an accountant, and Standard at £12 monthly or £10 per month billed annually. Different accounting features and add-ons have different limits; check the current table rather than the old invoice-cap assumption.
MTD Compliance Features
Zoho’s sole-trader page states that its free plan supports income-tax return submission and accountant access. This contradicts the earlier blanket claim that an annual return requires a paid tier. Verify the exact supported income and functions for your case.
Best For
Consider Zoho if the relevant plan meets the required filing and record-keeping workflow. Check bank-feed inclusion separately rather than assuming every free tier includes automatic feeds.
A low-cost option is useful only if the complete workflow works for your business. This review does not rank ease of use or integration quality.
Sage — Sole Trader and Accounting Are Different Products
Pricing UK
Sage now lists Sage Sole Trader Free for non-VAT-registered sole traders, separate from its paid accounting range. The former £12/£24 accounting prices and unnamed free-tool description were obsolete. Check exact eligibility and filing support; do not assume landlord coverage from the brand name.
MTD Compliance Features
Confirm the exact Sage product and the complete MTD workflow, not just VAT recognition. This review supplies no evidence that Sage payroll integration is the strongest of these five.
Best For
Consider the eligible Sole Trader product if its scope meets your needs. Property income or a different business structure requires an explicit product-support check.
An existing Sage relationship may help procurement, but it is not proof of the least disruptive migration. Demonstrate the actual transfer and return workflow before changing systems.
How to Choose the Right MTD Software for Your Situation
Build a short checklist before comparing prices: eligibility, income sources, complete filing scope, record transfer and total recurring cost.
Bank-linked FreeAgent: verify the account and transaction conditions, optional charges and suitability for the income you need to report.
Accountant access: agree who maintains records and submits each part of the return. Compare the total service and software cost; collaboration does not automatically outweigh any price difference.
Mobile capture: compare the same sample receipts in shortlisted products and inspect the extracted data.
Free software: check product eligibility and filing functions. “Free” can exclude bank feeds, extra users or optional modules.
Changing software is possible but requires a controlled migration. Verify exports, digital records, prior submissions and opening data, and agree the handover point; there is no guarantee of a frictionless switch.
FAQ
Which MTD software is approved by HMRC?
Use HMRC’s software finder to check the exact product and the income types it supports. Recognition does not mean HMRC recommends a vendor, and a brand name alone does not establish that every subscription tier covers your quarterly updates and complete tax return.
What is the first MTD quarterly deadline for 2026?
The first standard quarterly update for2026/27 covers6April–5July and is due7August2026. HMRC confirms no late-quarterly-update penalty points for2026/27. This does not remove the filing obligation or establish that all other tax deadlines or penalties are waived.
Can I use spreadsheets for MTD?
Spreadsheets can form part of a compatible digital-record workflow with suitable software. Use HMRC’s software finder for the exact income-tax product and supported income; a VAT bridging product is not automatically an Income Tax solution.
Does MTD affect the annual Self Assessment return?
MTD still requires a tax return through compatible software. For the 2026/27 tax year, the deadline is 31 January 2028. Confirm that your chosen software or combination of products supports all the income and adjustments needed for your return. HMRC’s tax-year example.
Is FreeAgent really free?
FreeAgent offers qualifying bank-linked access, including a monthly-transaction condition for Mettle. Optional add-ons may cost extra. Check the applicable account and product terms rather than treating an open bank account alone as an unconditional guarantee.
